Configure Company State and Local Tax Codes

To view, change, or add a new tax code, the user's role must have the Business Rules Access Rights granted for Tax Setup (Company).

1. From the Role Administration page, search for and select the desired role. The Add/Change Role page appears.
2. Select Business Rules Access Rights.
3. From the Business Rules listing, navigate to Tax Setup (Company).
   
4. Select the checkboxes to enable View and Edit rights.
5. Select Save.
   The users in this role can view and edit tax code setup for assigned companies.

You can view the details of your company's state tax profile in the Tax Setup (Company) Business Rule.

Navigation:System Configuration > Business Rules > Business Rules > Tax Setup (Company) > select Company > State tab

1. From the Tax profile page, select the State tab. The tax code grid lists state tax codes that have been configured for your company.

   State tax requirements vary from state to state. Some states may include special assessment taxes in addition to one or more of the following taxes:

   State Income Tax (SIT)	Under State Income Tax (SIT) laws, employers are required to withhold state income tax from an employee's wages. Tax rates vary from state to state, however state income tax rates are stored and maintained at the system level, so you do not need to enter state income tax rates. Note State income tax is not assessed on wages earned in the following states: Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, you must establish state income tax codes if you have employees in those states. All employees must be assigned a state income tax code even if state income taxes are not applicable to the state the employee resides or works in and you can only assign the tax code to an employee after its established.
   State Unemployment Insurance (SUI)	State Unemployment Insurance (SUI) is determined by applying a certain percentage to taxable wages paid by an employer. Employers are assigned an unemployment rate based on their employment history. States use varying formulas in determining the taxable wage base and tax rates.
   State Disability Insurance (SDI)	Some states provide a tax-supported state fund, known as State Disability Insurance (SDI), to benefit employees who are temporarily disabled through a non-work related illness or injury.
   State Unemployment Insurance-Linked Tax Codes	Several states have implemented additional employer taxes that are linked to the state unemployment insurance tax, such as tax code CAEFTER, "California Employee Training Fund, Employer"

2. Filter by state, as needed. You can also search for a state tax code using the search field.
3. Select a tax code to view details or apply changes to the tax code.

Each year, enter your new contribution rates and effective dates as soon as you receive the information from the agency. Update your contribution rates using the Tax Setup (Company) business rule.

1. From the Tax Code Details page, navigate to the Contribution rate section.
2. Select the + icon to add a new record to the table.
3. Enter the new contribution rate into the Contribution rate field, using a percentage format.
   Note Confirm the rate is accurately entered in percentage format. Colorado, Florida, Pennsylvania and Utah provide a SUI rate notice in a decimal format, so rate changes for those states must be converted into a percentage (%) rate when you submit.
4. Enter the effective date for the contribution rate into the Effective date field.
5. Select the Rate Change Reason from the drop-down list.

   • ADD: Use this Change Reason when adding a new state tax code.

   • RATE: Use this Change Reason when updating a new contribution rate with a new effective date as assigned by the agency.

   • EDIT: Use this Change Reason when making a correction to a rate change entry with the same effective date.

     Note An entry in the Contribution Rate table cannot be deleted. Use the Edit Change Reason to make corrections for a contribution rate.
6. Enter Bill rate and Bill wage limit fields.
   Note These fields are applicable for Professional Employer Organizations (PEO) only.
7. Select Save.
   The Contribution Rate for the selected tax code has been added for the effective date.
8. For some UKG Pro Tax Filing customers: There are some company classifications, such as Common Pay Master/Common Pay Agent, that require additional configuration for the SUI or supported SDI rate to be applied to your UKG Pro Tax Filing profile. For these special scenarios, create a SUI Guided Experience case in the UKG Community to apply the new contribution rates to your tax filing profile.

To make updates to an existing state tax code, select the tax code and apply the updates.

1. From the Tax Profile page, on the State tab, select the tax code from the Tax Code column. Apply the filters by state, or use the search fields, as needed.
   The Tax Code Details page appears.
2. Select the Edit icon.
3. Enter the updated information into the applicable fields.
   Note Many fields on the tax code details page are read-only and not available for updates.
4. Select Save.
5. For UKG Pro Tax Filing customers, there are some tax codes or company classifications that require additional assistance for the tax code to be added to your UKG Pro Tax Filing Profile. If you are adding or editing one of the following tax code types, create an Add/Change Tax Code case in the UKG Community to apply the updates to your Tax Filing profile.

You can add and configure state tax codes for a new state on your tax profile.

1. From the State tab on your Tax profile, select the Add new tax code button.
   The Add new tax code page appears.
2. On the General info section, select the state to add tax information from the drop-down list. Then, select Next.
   Note You are unable to add a new state tax code if all tax codes for the selected state have been configured. To make changes to an existing state tax code, select the state tax code from the State tax profile page.
3. On the Tax Codes section, select the checkboxes for the tax codes you want to setup. Then, select Next.
   
4. On the Setup section, complete the fields for each tax code.
   The following fields may be available for each tax code, depending on the state tax code type:

   Field	Description
   Do you have a valid EIN/Tax ID?	Select Yes, I have applied for one, or No/I'm not sure. Important UKG Pro Tax Filing customers must register with each agency. Refer to the Tax Jurisdiction Requirements job aid for state agency information.
   State ID Number	The State ID Number field is used to enter your company's Employer Identification Number (EIN) provided by the state. Refer to the Tax Jurisdiction Requirements job aid for valid EIN formats. Note The state assigned EIN may differ from the company Federal Employer Identification Number (FEIN).
   W-2 Box 14 Label	Some state tax jurisdictions require a specific label in Box 14 of Form W-2, or you may want to include a label for company reporting purposes.
   Link Codes Is Linked Do Not Use Link	Is Linked: Allows you to designate that the tax code has a link to another tax code Do Not Use Link: Allows you to disable (break) the link to the other tax code.
   Enable tax group calc	Enable Tax Group Calc indicates that this tax code is considered across multiple companies that are related by a tax calculation or group identification.
   Employer tax	Employer Tax indicates this tax code is an employer-only tax. This field is set by the system and is not editable.
   Taxation method	The taxation method determines the method for calculating the employees current tax amount.
   Tax code inactive for UKG Pro Tax Filing	If selected, this tax code is inactivated for the UKG Pro Tax Filing tax profile.
   Contribution rate	Enter the contribution rate for a SUI or SDI tax code rate, as assigned by the agency. Use a percentage format to enter the contribution rate (for example, enter 2% instead of 0.02).
   Effective date	Enter the effective date for the contribution rate
   First tax filing quarter	Select the quarter in which to begin filing for the state tax code. The curent quarter is selected by default.
   First tax filing year	Select the year in which to begin filing for the state tax code. The current year is selected by default.
   Deposit frequency	Enter the deposit frequency that your company is required to remit tax liabilities as assigned by the agency Note The Deposit frequency selection list only displays frequencies supported by the tax agency and UKG Pro Payment Services. The most common deposit frequency for the tax agency is listed as the default.
   EFT password	Some agencies require a PIN number or password in order for UKG to submit electronic payments. Enter the password for the agencies that require an EFT password.
   Additional EIN information	A small number of agencies require additional EIN information. Refer to the i icon for a list of agencies that require additional information, and the information required.
   County Code	A small number of agencies require additional county codes entered for tax filing. Refer to the i icon for a list of agencies that require a county code.

5. Select Next.
6. On the Review section, carefully review all the information you entered for each tax code. Select the Back button to make any changes. After you review the information, select Submit.
   The tax codes have been added to your company profile in your UKG Pro solution. Select OK to return to the State tax profile.

   Note You may create and save a new tax code with missing tax filing information, if agency information is not available at the time of creation. Once you have the tax filing information from the agency, select the tax code to edit and enter the information.
7. For UKG Pro Tax Filing customers, there are some tax codes or company classifications that require additional assistance for the tax code to be added to your UKG Pro Tax Filing profile. If you are adding or editing one of the following tax code types, create an Add/Change Tax Code case in the UKG Community to add the new state tax code(s) to your Tax Filing profile.

You can view the details of your company's local tax profile in the Tax Setup (Company) Business Rule.

Navigation:System Configuration > Business Rules > Business Rules > Tax Setup (Company) > select company > Local

1. From the Tax profile page, select the Local tab. The tax code grid lists local tax codes that have been configured for your company.
   Local tax requirements vary from state to state. The following local tax types are available:

   Local Tax Type	Description
   Local Income Tax (LIT)	Some local tax jurisdictions apply different rates based on whether the employee works and resides in the jurisdiction (resident rate), or works in the jurisdiction and resides in a different jurisdiction (non-resident rate). For those jurisdictions, the system provides separate tax codes for the resident rate and for the non-resident rate. If you have employees working in one of these jurisdictions, it is important that you set up the appropriate tax codes. You may need to set up both the resident and non-resident tax codes. Local income tax codes may apply to any of the following jurisdiction types: Borough (BORO) City (CITY) County (CNTY) Local Income Tax (LIT) Township (TWP) Village (VIL)
   School District (SD)	School district taxes
   Occupational (OCC)	Occupational taxes
   Workers' Compensation (WCC)	Workers' compensation
   Other (OTH)	All other local tax types that do not fall under the other categories.

2. Filter by state and county, as needed. You can also search for a local tax code using the search field.
3. Select a tax code to view details or apply changes to the tax code.

To make updates to an existing local tax code, select the tax code and apply the updates.

1. From the Tax Profile page, on the Local tab,select the tax code from the Tax Code column. Use the State and County filters, or the search field as needed.
   The Tax Code Details page appears.
2. Select the Edit icon.
3. Enter the updated information into the applicable fields.
   Note Many fields on the tax code details page are read-only and not available for updates.
4. Select Save.
5. For UKG Pro Tax Filing customers, there are some tax codes or company classifications that require additional assistance for the tax code to be applied to your UKG Pro Tax Filing profile. If you are adding or editing one of the following tax code types, create a Add/Change Tax Code case in the UKG Community

You can add and configure a local tax code for a new local tax jurisdiction on your tax profile.

1. From the Local tab on your Tax profile, select the Add new tax code button.
   The Add new local tax code page appears.
2. On the Tax codes page, select the tax code(s) you want to add. Use the State, Counties, and Local Type filters, as needed.
   Note UKG Pro US Tax Filing customers must register with the local tax agency. The tax code information, rates, and effective dates must match agency documentation.

   
3. On the Setup and finish page, the listing of your selected tax codes is displayed in the table. Some fields may be pre-populated by default. Select the tax code to add details for the local tax code.
   The Edit tax window appears.
4. Enter the information for the following fields:
   

   • Do you have a valid EIN/Tax ID?

   • Local ID number

   • W-2 box 14 label

   • Enable tax group calc

   • For CTS tax filing: Exclude from daily/quarterly

   • For CTS tax filing: Exclude from W-2 file

   • For UKG Pro Tax Filing: Tax code inactive for UKG Pro Tax Filing

5. Select Save. Complete the setup for each new added local tax code.
6. After setting up each new local tax code, review the information from the Setup and finish page. Select Finish.
   The new local tax code(s) are added to your company profile in your UKG Pro solution. Select OK to return to your Company Local Tax Profile.
7. For UKG Pro Tax Filing customers, there are some tax codes or company classifications that require additional assistance for the tax code to be added to your UKG Pro Tax Filing profile. If you are adding or editing one of the following tax code types, create an Add/Change Tax Code case in the UKG Community to add the new local tax code(s) to your Tax Filing profile.